The Nifty traded lower on Wednesday, after gaining for three consecutive trading days. It managed to close at 11,046.10 shading 59.25 points. Banking and automobile shares were in pain and we saw buying in IT stocks as Rupee depreciated on intraday. Niftybank shed 1.14 percent and closed at 27,804.30, losing 321.85 points, which hurt the market sentiment. As per option data, huge call writing at 11,100 will act as major resistance, we saw put unwinding on the strikes ranging from 10,500 to 11,200 showing weakening of base. In the remaining week, we could see market taking support at 11,000 and will act as make or break level for the week.
Buy Havells Ltd. (above Rs 672)
Target: Rs 698
Stop loss: Rs 652
The stock is trading in range despite the market’s volatile movement, and is showing a sign of reversal from the lower levels. It has witnessed major resistance breakout in daily charts that would result in strong bullish movement. Considering the technical evidence discussed above, we recommend buying the stock above Rs 672 for the target of Rs 698, keeping a stop loss at Rs 652 on closing basis.
Buy Tech Mahindra (Rs 696)
Target: Rs 722
Stop loss: Rs 673
The stock is forming inverted ‘head and shoulder’ pattern on daily chart and breakout above 696 will lead to a strong bullish movement. We recommend buying the stock at Rs 696 for the target of Rs 722, keeping a stop loss at Rs 673 on closing basis.
Disclaimer: The analyst does not hold position in any of the stocks mentioned above.